YouSaid · the spoken record

Pat Toomey

lines on the record: 26
first: 2022-09-15
most recent: 2022-09-15
sittings or episodes: 1
sources: podcast

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“Information, and I think that's always been understood to be financially material. And here we have this really speculative guesses about CO2 emissions by your customers. This is Way, way beyond anything that Congress has authorized in my view.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“And it's not even financially material to the issue. Where they're proposing that somebody by virtue of the fact that you issue Stock or bonds on an exchange that you have to disclose not just the amount of CO2 that your business operation releases, but Got to figure out how much CO2 is released by the source of the energy that you purchase, and then in what I think is the height of absurdity. You're supposed to figure out. The CO2 released by all of your suppliers and all of your customers, this is ridiculous. It's not even possible to comply with, I don't think. It's not meaningful. And there's no authority, by the way, for the SEC to do this. You know, Authority for the SEC. Is to require the disclosure of material”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's very, very different. First of all, we're starting from a point with crypto where there is zero regulation, right? There is no requirement. There is no regime. There is no disclosure. There is nothing. And so we're having a conversation about, well, is there anything at all that we ought to provide? And I'm suggesting, yeah, there probably is some. You can't even begin to make that suggestion about ordinary security, right? I mean, my God, we go way overboard in terms of all the disclosures that are required. Useless information that nobody reads that does not helpfully inform investors. And what Gary Gensler is doing now with this proposed climate rule is to add this massive new category, many multiples of more expensive than all the rest that's ever been applied before in terms of the cost of compliance.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Not politically, right? I think there will be political pressure to do something. And I could probably support some kind of disclosure requirement. But again, I'd go back to the fact that I think we ought to respect the judgment of consumers. And, you know, I think with some minimum disclosure, a consumer can decide, do you want to trade on an unregulated, automated decentralized crypto exchange? Or do you want to go to Coinbase? You don't have to, you know, it's not like you've only got one choice. You've got multiple choices. I think that's an acceptable place to lend. Now, I probably personally would favor a lighter regulatory touch than most of my colleagues. Who knows where that ends up? But I think consumers can generally make good decisions for themselves.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“The administration would like to get something done. There are Republicans pretty overwhelmingly would like to get something done. Some Democrats would as well. On the broader outside of stablecoins, the question of ordinary, if I can say ordinary crypto projects, right, what does that mean? But non-stablecoin, let's say. That's tougher. I think it's more difficult. You do have a bipartisan bill. You have actually two bipartisan bills, right? They're different. The Lummus Gillibrand Bill and the Stevenag Bozeman Bill. So you're starting to see some engagement by members and members on relevant committees of jurisdiction. I'm still going to hold out hope that we get a stable coin bill done this year. And next year, Congress might do considerably more.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Think the answer is yes, at least in some respects. So, for instance, I believe that when Terra and Luna collapsed, It seems to have elevated the issue of stablecoin regulation with the White House and with the administration in general and with some of my colleagues. So that real world event, and even though it was an algorithmic stablecoin and I think the most likely regulation on stablecoin will actually be for payment stablecoins, the fact that there was a sort of sensational bad event did move this up the list of priorities, put it on people's radar who didn't have it on their radar. So I do think what happens in the crypto world does bear on Congress's inclination. I still think there's a chance to get stablecoin legislation done this year.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Use artificial intelligence on an open source blockchain and use that technology to discern suspicious transactions. Don't just assume that everything is suspicious because it's more than $10,000. Don't just import this completely, really, in many ways obsolete technology and impose it on crypto, but use the tools that we have now, and there are private companies that do this already, right? And we've got these great stories of recovering stolen crypto even because this is totally traceable. Now with Tornado, I understand part of the purpose is to make it much more difficult to trace that. So it does raise some additional challenges. I'm not convinced that the right answer is to apply the current banking.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“So, what we know for sure is that 99.7% of these reports are false positives, right? There's nothing wrong with these transactions, but we haven't even raised the dollar threshold since the 1970s, not even to reflect inflation. And so we just have this massive reporting requirement. It's quite onerous to comply with, and it swaps the Treasury with all kinds of this information. What I think we ought to do, and I'm not an expert in this area, but I've spoken at some length with people who are, is”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“So, there's a lot to try to unpack there. And part of it in all candor is this is new and I am still really trying to make sure I understand the implications of this. My first reaction is I get very concerned about sanctioning code. That does worry me. That concerns me. I think there's significant First Amendment issues. I think that is probation. Having said that, I do acknowledge that there is illicit activity that we want to be able to identify. And if we can't prevent it, at least go after the bad guys when they engage in it. What I would suggest is the wrong way to do that is to take this archaic system that we now impose on banks and other financial institutions and apply it now to this whole new technology. I'm referring to the reporting rules. Every transaction”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“The apple's still just an apple, but the activity is something that is appropriately regulated. So if you have a crypto project where someone decides, hey, I'm going to offer this return to an investor because I'm going to this clever way to cover an eye-popping interest rate to describe it. Then yeah, that probably requires regulation and certainly disclosure.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say if the nature of the arrangement that you're describing is one in which there is a return that is offered or promised. And yes, then it starts to look a lot like a security, or at least the activity is the activity of a security. If you said, give me a bushel of apples and I will give you an apple a day and at the end of a month, I'll give you the bushel back. I would say that actually looks a lot like a security arrangement because of the return that you're offering. And it probably actually meets the Howey test, but it doesn't make the Apple a security.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you know, my approach here is the same as it is in most areas, which is to have a lot of respect for consumers. I think sometimes some of my colleagues and some of the regulators adopt a really paternalistic approach. And they want to protect consumers from themselves. And they want to put all kinds of regulations about who can do what and under what circumstances. I don't view the world that way. The way I think we ought to, I think we ought to do is make sure that consumers have enough information to make a well-informed decision about what they want to do. So it's about, for me, it's mostly about disclosure. With the stablecoins, for instance, the heart of the regime that I'm advocating is full disclosure, audited disclosure, attestation of continuity of the assets backing the stablecoin. That's the heart of it.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“You'd have to be licensed to issue it, and then we go through how you could go about obtaining such a license. And if you have them, then you'd have to have high quality assets, liquid assets, backing it, cash and cash equivalents. We talk about the capitalization that would be necessary for the issuing entity. Anyway, the point is we lay out the criteria by which this could be regulated. And I think it would make a lot of sense to start there. I could imagine you could start in other places, but that's my first ambition in this space.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“As you know, stablecoins are the currency that's used to go in and out of crypto generally. It's also, in some ways, I think the easiest and simplest challenge for Congress and for regulators to solve. So I've introduced legislation or a draft of a bill that deals with the category of stable coins that I think could plausibly be widely used as a method of payment. And that would be asset-backed stablecoins. I think algorithmic stable coins are in a different category. But what we define, what I define as payment stablecoins and are backed by assets, I think a regulatory regime makes sense. It would require, for instance, rules about disclosure. What is the nature of the asset? It would require that”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the first thing I'm working on is actually, I think of it at least conceptually as preceding some of the things we've been discussing. And that would be legislation that will provide guardrails for regulating stablecoins.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I don't think that's a strong argument because it really seems to be arguing for ambiguity and hiding the ball and ensuring that both consumers and developers just don't have clarity on this. Look at it from the point of view of a creative developer who has an idea for an application of a smart contract maybe, but it's got to run on a layer two protocol. his concern is he really doesn't know Is there a way to design this so that it wouldn't be considered a security or do I have to go to bed every night wondering whether the SEC is going to come knocking on my door in the morning and accuse me”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“The other thing I would point out is that every security that I can think of involves a claim on an issuer, right? If it's equity, it's a claim of ownership. If it's a bond, it's a claim on the assets, right? There's a specific claim, and there's usually also a specified return. Either it's an interest rate or it's a dividend or it's a promise of some share of income. Crypto doesn't typically have that. Now, there may be some tokens that do, and okay, I'll call them a security, but when there is no claim on an issuer, when there is no built-in return, then I'm not sure it should even pass the Howie test. And at a minimum, I think you have to acknowledge that it's very different from all the securities that we have acknowledged over the years. And so that's why I think really.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Legislative guidance that would make it clear what is and what is not would be very, very helpful. And I would say two things, if I could, that ought to cast serious doubt on Chairman Gensler's argument. One is There are many projects where there is no centralized authority, right? That Bitcoin is an obvious case, but it's not the only one. And if you have a truly decentralized platform, you have code, you have software, that's what it is. And the fact that people are using it doesn't mean that there's a central authority. And the idea of a central authority, really traditionally an issuer, is at the heart of what makes something a security.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Crypto security and what does not. By the way, you could use crypto tokens in a transaction that definitely falls under the jurisdiction of the SEC, right? So Celsius and Voyager, when they're taking crypto deposits, paying an interest rate on it, using those deposits to then lend to, I suppose, hedge funds and other institutions. definitely i think falls under the sec's brief And frankly, I think there's questions about why after an enforcement action against Blockfire early in the year, nothing happened to Celsius and Voyager until they blew up. But that's a little bit different from the question of why is it that every crypto project other than Bitcoin is a security? I think”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a great question. And I think the answer is there are probably some crypto projects, some protocols and associated tokens that really are securities and therefore could and should be regulated by the SEC. But I think many, many are not. And that's my fundamental difference with Chairman Gensler. maintains that virtually all cryptocurrencies are securities. He will acknowledge that Bitcoin is not. I don't think you could get him, well, I'd suggest you try. I have not been able to get him to identify a single other token that is not a security. And I think his argument is tenuous. And part of the problem is I think there has not been sufficient clarity as to what does constitute a”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Kinds of applications that are likely to emerge and we should not presume that that can't happen or and we certainly shouldn't do anything to preclude it.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“I also think that there's going to be very exciting innovations that we probably can't imagine yet when the internet was first being developed. I don't think too many people envisioned Amazon and Uber and Netflix and the things that have totally transformed consumption and not just consumption of information, but even consumption of goods and services. Well, I think that could happen here as well. I think programmable money, for instance, is a very exciting technology, the ability to have embedded in a unit of value, a form of money, a transaction, a movement of that value based on some exogenous but verifiable event. That's really interesting. And I could imagine lots of applications. Validating ownership in an immutable way, that's something that blockchain allows. So I think there's all”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“It's held by financial institutions. But I think the ease of transactions, the ability to move money on a peer-to-peer basis and leave out intermediaries that inevitably charge a fee for the execution. In particular, that fee.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, first of all, I do think that we have a privacy right to move value in the form of a currency or some other asset without the government watching everything we do. There's a reason why I think Congress would overwhelmingly insist that we not abolish cash, right? I mean, in China, I think they have or they're close to as a practical matter abolishing cash. It's very convenient for the government to be able to monitor everyone's every transaction to force everything into a digital space that in China the government has eyes on. So that's one. I do think there's a legitimate interest in privacy. There's more practical matters because I think a lot of people think of the volume of transactions that go on credit card and obviously that information is not uniquely held by the consumer.”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Projects are fundamentally different. So we have this new technology that came along. And, you know, I guess you could blame Congress for not moving quickly to establish the legislative guidelines that would then make it clear exactly what buckets these assets should be in, including the possibility that it's an altogether new bucket and what the various regulators, authorities ought to be. And in the absence of Congress speaking, then you will have what we are witnessing, which is regulators kind of trying to grab authority here, whether or not they ought to. And that's no way to create an environment for a really important new technology to thrive. So that's why I'm so determined to get something done in the legislative realm so that we can provide some certainty and hopefully a”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think I agree with your discussion with Tracy about the inherent difficulty of trying to shoehorn these crypto tokens from these various projects into existing law. Much of our securities law is based on 1933 and 1934 legislation, literally, and court cases that followed that often in the 40s and 50s. Can you imagine being more far removed from crypto, right? I mean, so it doesn't fit well. There are attributes of these protocols and the corresponding tokens that are completely unlike any actual security, something that we all universally would agree as a security. There are ways in which most crypto”
2022-09-15 · Odd Lots · Senator Pat Toomey on the Bad State of Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT · source